Cushman & Wakefield (NSW) Pty Ltd v Farrell

Cushman & Wakefield (NSW) Pty Ltd appealed to the Court of Appeal of New South Wales against orders made in the District Court concerning a dispute over contractual entitlements. The core of the disagreement lay in the interpretation of a clause within an employment agreement that stipulated payment calculated by reference to years of service with a "Related Company" as defined in the *Corporations Act 2001* (Cth). The appellant contended that one possible construction of this clause led to a commercially incongruous outcome, suggesting an error in the lower court's determination.

The primary legal issue before the Court of Appeal was the proper construction of the contractual clause in question. Specifically, the court had to determine whether the years of service with a related company, as defined by the *Corporations Act*, were to be included in the calculation of the respondent's entitlements under the agreement, and if so, how that calculation should be performed. The ambiguity in the clause's operation and the potential for a commercially unreasonable result were central to the court's task.

The Court of Appeal found that the interpretation favoured by the respondent, which would have resulted in a commercially incongruous outcome, was not the correct one. The court applied principles of contractual construction, emphasising that where a contract is ambiguous, the court should adopt the construction that is most consistent with the commercial context and avoids an absurd or unreasonable result. The appeal was allowed in part, with certain orders of the District Court being set aside, and both the Amended Statement of Claim and the Amended Cross-Claim being dismissed. The parties were directed to file submissions on costs.